The US’s 50 biggest companies are stashing $1.6trn worth of cash in tax havens according to a report by the global charity Oxfam.
According to data from 2015, the new sum of offshore money is $200bn more than was hidden the previous year.
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It is thought that companies are using tax havens and boosting their investment in political lobbying in order to push for even greater tax breaks in their home country.
As well, US president Donald Trump’s proposed tax reforms could further sway the country’s tax laws in favour of these corporations, widening the gap between the rich and poor in the US.
The charity’s head of inequality, Ana Arendar, said:
“These companies have deepened their use of tax havens and increased efforts to build influence to push for even greater tax breaks than they already have. Corporate tax dodgers cheat the US out of approximately $135 billion in unpaid tax revenues every year and poor countries out of an estimated $100 billion annually.”
The companies in question, which include the likes of pharmaceutical company Pfizer, Goldman Sachs, General Electric, Chevron and Apple, are reportedly using a secretive network of 1,751 subsidiaries in tax havens to stash earnings offshore. This is an increase of 143 tax havens, allowing the companies to store an extra $200bn compared to data from 2014.
Of the companies analysed, they collectively spent $2.5bn lobbying the US government between 2009 and 2015 and around $352m was spent lobbying specifically on tax issues which helped them to secure over $423bn in tax breaks.
According to Oxfam, for every $1 these companies spent lobbying on tax, they received an estimated $1,200 in tax breaks.
Five companies out of the 50, AT&T, Comcast, Exxon Mobil – whose former chief executive is now Trump’s secretary of state, General Electric and Verizon Communications, account for a quarter of all lobbying on tax.
This report comes just over a year after the Panama Papers investigation which attempted to unmask the people and corporations using the Panama-based law firm Mossack Fonseca, to store money in tax havens all over the world.
Arrendar added: “This report shows how tax avoidance continues to help the rich get richer at the expense of the poor. Governments, including the UK and the US, must work together to ensure all big businesses pay their fair share.”
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Throughout Trump’s presidential campaign he maintained he would cut corporate tax from 35 percent to 15 percent. As well, he wants to propose a one-time “holiday” at a tax rate of 10 percent for corporate profits brought back to the US from offshore shore accounts, to encourage companies to bring money back into the country.
Apple, in particular, could be set to benefit from these reforms, according to analysis by US bank Citigroup. The company is holding $230bn in foreign subsidiaries and is expected to move its cash back to the US under the “holiday”.
Citi analysts told Business Insider:
“We see Apple as a significant beneficiary of Trump tax reforms. Apple is very well positioned to benefit from potential tax reform of either or both a repatriation tax holiday and or a lower corporate tax rate.”